Fire as an economic disincentive to smallholder rubber planting in Imperata areas of Indonesia

Abstract

A fire dimension was incorporated into an existing bioeconomic spreadsheet model of a smallholder rubber agroforestry system, with Imperata as the understorey to rubber. The augmented model was then used to trace the physical and economic consequences of fire. Imperata is regarded as providing the fire fuel load in the model, either as the rubber understorey, or as separate grassland. The risk of fire was demonstrated to be an economic disincentive to rubber growing in Imperata areas. Even a modest fire risk of 10% per year considerably reduced expected profit from rubber growing. In addition to these private costs imposed by the risk of fire, there are `social' costs resulting from fire spreading across farm boundaries. If one farmer reduces the understorey Imperata fuel load (eg. via tree planting), fire risk is reduced for all neighbouring farmers. In this sense, fire risk can be regarded as an `environmental externality' comparable to herbicide drift. There are also broader environmental issues emanating from fire risk in Imperata grassland areas. These include significant respiratory and other problems associated with smoke haze. These various externalities imply that some of the responsibility for fire control appropriately rests with communities, or governments as their representatives, rather than solely with individuals. An empirical example of the benefits from community action, through a coordinated approach to rubber planting, is presented, based upon the modelling work. The data availability for building the fire component of the model was quite limited. Farm survey work was carried out in 1995 and 1996 in an attempt to gain an increased understanding of the nature and importance of fires in Imperata grassland for smallholder rubber producers. This provided some general guidance, and allowed inferences to be made about some parameter values. Other values were obtained form expert opinion. Recognition of the importance of grassland and forest fires in Indonesia implies that there will be more relevant research output forthcoming. Conceptualisation of an economic framework within which some types of fire research can be evaluated is regarded as a key output of the current work.